Bitcoin Hits Record High Following CME Announcement
Bitcoin, the most popular cryptocurrency available, hit record highs following the announcement that the CME plans to establish bitcoin futures later this year. This is huge news for a couple of reasons. It is further establishing Bitcoin as a legitimate financial instrument and it will allow more institutional investors access to the cryptocurrency, meaning more money will be available to purchase it. This will also add liquidity to the bitcoin market and it can be used as a hedge against cash positions.
Anyone who follows cryptocurrencies knows this is big news and is speculated that it could push prices over $10,000. Currently Bitcoin is trading just above $7,000 per coin which puts it up over 870% on the year!
Bitcoin Futures Regulations
The CME Group chairman Terry Duffy reiterated the increased client interest within cryptocurrency market which is what pushed them to this decision. However, there are still some regulatory hurdles that will have to be made:
“We’ve been working with the regulator. They understand our application. And they understand our model very, very well,” Terry Duffy, CME Group chairman and CEO, told CNBC.
According to Duffy, the Commodity Futures Trading Commission besides the full application procedure ought to succeed. The prominent global exchange for futures trading is the newest application into the business of volatile digital currency.
JPMorgan called bitcoin a fraud currency and announced to fire any staff in his company found trading the bitcoin. On the other hand, Larry Fink, the founder of BlackRock nicknamed bitcoin the index of cash laundering. Some countries like China have banned cryptocurrency exchange in the nation.
Bitcoin Technicals
As you can see in the chart of Bitcoin above courtesy of TradingView, it has absolutely skyrocketed the past six months with prices hitting highs of 7,354 as of November 2. With this fresh news still being passed around, speculators will likely continue to push prices higher but I wouldn’t be surprised to see a pullback possibly into the $6,000 range where there is major support. Below $6,000 we are looking at the $5,600 and $5,200 levels for support.
Something to keep in mind is when we have big news like this we will usually see buying occur until we find out that it has been approved or not and then we will see a big selloff. Kind of like buy the rumor, sell the news. I’m not saying that it will happen with Bitcoin but it is definitely something to be aware of.